iBuying company Opendoor Technologies (OPEN) is set to report its third-quarter results today, Nov. 6, after the market closes. This time, the earnings presentation will be livestreamed on the Robinhood app and will include open Q&A sessions for shareholders. This is likely an effort to reach a wider audience, especially for a company that has experienced significant meme hype.
The company is facing an uncertain backdrop. Homebuying has been under pressure due to high interest rates. Despite rate cuts, experts remain skeptical about whether home affordability will improve enough to attract a significant number of buyers. Moreover, Fed Chair Jerome Powell has indicated that further rate cuts are not guaranteed.
Amid this, we take a closer look at Opendoor.
Opendoor Technologies, headquartered in San Francisco, California, operates a technology-driven platform that transforms the way residential real estate transactions occur. The company enables homeowners to sell their properties quickly by making instant cash offers and buying homes directly. Sellers benefit from a hassle-free process that eliminates the need for showings or open houses.
After acquiring properties, Opendoor performs necessary repairs and then resells the homes. Its operations are supported by proprietary algorithms that analyze market data to price homes competitively. In addition to buying and selling homes, Opendoor offers services such as home assessments, financing, and title services, creating a seamless and integrated experience for both buyers and sellers across multiple U.S. markets. The company has a market capitalization of $5.32 billion.
The company’s stock has skyrocketed as retail investors piled on it as a bargain find. As with all meme names, there are concerns about whether the surge is based on real fundamentals. Over the past 52 weeks, OPEN stock has gained 292%, while it is up 899% over the past six months. It last reached a 52-week high of $10.87 in September but is down 36% from that level.
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Opendoor’s stock is trading at a cheap valuation despite the unprecedented surge in its stock price. Its price-to-sales ratio of 1.02 is lower than the industry average of 4.36.
Story Continues
On Aug. 5, Opendoor reported its second-quarter results for fiscal 2025, which indicated that the company’s financials are improving. The company reported that it is working on expanding its agent-led distribution platform, enabling its partners to offer multiple solutions to customers tailored to meet the needs of every homeowner. This would allow Opendoor to serve more sellers while also generating capital-light revenue streams.
In Q2, Opendoor’s revenue increased by 3.7% year-over-year (YoY) to $1.57 billion. Its period-end inventory level reduced from $2.23 billion in Q2 2024 to $1.53 billion in Q2 2025. Its net loss also decreased from $92 million in the prior year’s period to $29 million.
While its contribution margin declined from 6.3% to 4.4% over the same period, its adjusted EBITDA increased significantly from a loss of $5 million to an income of $23 million. This being the first quarter since 2022, the company reported positive adjusted EBITDA.
However, the company also issued subdued guidance compared to its ascending Q2 results. For the third quarter, Opendoor expects its revenue to be in the range of $800 million to $875 million, while its adjusted EBITDA is projected to be a loss of $28 million to $21 million.
Contrarily, Wall Street analysts have faith in the company to reduce its losses. For the third quarter, analysts expect Opendoor’s loss per share to decline by 30.8% YoY to $0.09. For the current year, losses are projected to decrease 39.6% annually to $0.32 per diluted share.
Wall Street analysts have become more cautious about Opendoor’s prospects. In August, Keefe Bruyette analyst Ryan Tomasello downgraded OPEN stock from “Market Perform” to “Underperform,” setting a $1 price target, citing expectations of a broader loss in the second half of this year. The firm also predicts uncertainty stemming from Opendoor’s strategic pivot.
Analysts at Zelman & Associates also assigned a $1 price target to Opendoor’s stock while downgrading it to a “Sell,” likely predicated on the company’s subdued guidance and uncertainty surrounding its prospects.
On the other hand, analysts at UBS maintained a “Neutral” rating on OPEN stock while raising the price target from $1.30 to $1.60. While UBS analysts do not expect Opendoor to experience robust growth, the outlook is primarily due to depreciation in home prices.
Wall Street analysts are advising caution right now, with a consensus “Hold” rating overall. Of the 12 analysts rating OPEN stock, one analyst has rated it a “Strong Buy,” six analysts are playing it safe with a “Hold” rating, two analysts have given a “Moderate Sell” rating, and three analysts have suggested a “Strong Sell.” The consensus price target of $1.62 represents 77% downside from current levels. The Street-high price target of $6 indicates a 12% downside.
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On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
